Time Is Money: How to Make Lost Revenue in Your Salon a Thing of the Past

This post discusses a pre-payment policy that requires payment in full at the time of booking and describes why these policies are necessary for appointment-based salons.
An appointment-based salon:

doesn’t accept walk-in traffic at all (appointment-only), or

isn’t in a high-traffic area and is unlikely to make up a time loss with a walk-in client.

This post is a portion of a much longer chapter in my forthcoming book Salon Management & Ownership for the Complete Amateur. Because so much demand exists for policy guidance, I’ve modified the chapter and created a new downloadable–The Policy Creation and Enforcement Pack.

This pack includes everything you need to understand why certain policies may be required, who should and shouldn’t implement them, and when and how to introduce them in your salon. The kit includes templates for every salon policy imaginable, plus placement and wording recommendations, enforcement tips, and enforcement correspondence. I’ve also provided guidelines for creating and effectively communicating any additional polices your salon may require in the future.

So, if you’re having a hard time setting and enforcing boundaries, check out The Store and get your Policy Creation and Enforcement Pack today.

You know what sucks? Booking a four hour block of time for a color correction client, only to have that client “forget” the appointment or cancel at the last minute. How often does this happen to you? Have you ever calculated how much these losses are costing you?

I have performed these calculations for many salon owners and can say with complete confidence that no appointment-based salon can afford to operate without cancellation policies. You’ll hear it said that no-shows are the single highest cause of lost revenue in the salon, and—while I doubt anyone has performed a nationwide investigation to inform that conclusion—in my experience, there is certainly a lot of truth to it.

NO-SHOWS, LAST-MINUTE SERVICE DOWNGRADES, AND LATE-CANCELLATIONS ARE DAMNED EXPENSIVE.

Have you ever thought about where cancellations and no-shows come from? What makes clients believe it’s okay to reserve a professional’s time and then treat it as if it’s worthless?

You’re probably not going to like what I have to say, but we only have ourselves to blame. In this post, I’ll tell you exactly why that’s true and why appointment deposits are absolutely necessary, not just to ensure we get paid, but so we can take back control of our profession, command the respect of our clients, and eliminate clients who end up costing more money than they generate. It’s time to shift the way we operate in a big way and start taking control of our businesses.

Every day, no-shows and late-cancellations disrupt salon schedules and profitability. Some clients have reasonable excuses—illness, unexpected emergencies, or vehicle breakdowns. If you have kids, surely you know what it’s like to get them ready for school just to have them projectile vomit their Apple Jacks all over themselves before you’ve made it out the front door—or worse, right after you’ve gotten them strapped into the car. (Been there.)

UNEXPECTED DISASTERS BLINDSIDE OUR CLIENTS JUST AS THEY BLINDSIDE US.

But what about non-emergency no-shows and late cancellations? You know, those two besties who were so desperate to book their mani/pedis at the same time so they could be serviced together, but who answer when you call ten minutes after they were scheduled to arrive and tell you, “Oh, um, we decided to go out shopping and grab some lunch instead.” Then there’s that client who called you fifteen minutes before her appointment to let you know she “stayed at the beach later than she expected and won’t be able to make it in time.” Oh, and let’s not forget the innumerable clients every year who nonchalantly tell you they “just forgot” right before they ask you to reserve another two or three hours of your time for them. Those clients lack respect for our time and our profession, and we allowed it.
Don’t believe me? Ask yourself: How many of those clients would “forget” their appointment (or worse, intentionally blow it off) if they had already paid for it in advance and knew that your cancellation policy didn’t permit refunds?

I’ll save you the mental gymnastics—absolutely none of them.

For three years, I have required payment in full at the time of booking. My cancellation policy doesn’t permit refunds to those who cancel with less than 24-hour notice, those who no-show, or those who decide to downgrade their services.

HOW CAN WE EXPECT CLIENTS TO VALUE OUR TIME WHEN WE DON’T ATTACH A PRICE TAG TO IT?

Why should we allow clients to reserve time without asking them to put their money where their mouth is? After all, we’re committing to them–and our commitment has quantifiable value. When we reserve time exclusively for a client, we’re promising to be present and available. We’re incurring operational expenses for rent, electricity, and support employees. We trust and rely on our clients to arrive so we can cover those costs and make a living. We’re incentivized to fulfill our commitment to them because if we don’t, we lose revenue. However, clients with no proverbial “skin in the game” have no incentive to fulfill their obligations to us.

THIS ARRANGEMENT ISN’T JUST UNACCEPTABLE, IT’S UNSUSTAINABLE.

Since implementing my prepay policy, I’ve learned:

The majority of my clients understood the need for the policy and had no complaints about it.

Clients reported that they preferred pre-payment because it was straightforward and convenient.

The clients who complained about the policy were the reason I implemented it in the first place. These clients did me a favor by leaving and becoming another salon’s financial liability.

Cancellation and no-shows immediately ceased once the policy was implemented.

Client overturn was minimal and the clients lost were the ones you’d expect (the chronic no-shows and late-cancellers).

The quality of client the salon attracted improved. Clients willing to pay in advance arrived promptly, treated employees and the salon more respectfully, and often preferred to book standing appointments.

WHEN YOU TREAT YOUR BUSINESS LIKE A BUSINESS, CLIENTS WILL TREAT IT LIKE ONE TOO.

Many appointment-based salons, instead of taking payment at booking, utilize an ineffective policy that merely threatens to charge the client at some point in the future. However, these salons lack an actionable plan. They’re not requiring clients to put their cards on file or taking deposits. What’s the point of having policies if you’re not going enforce them?

These salons end up with a long list of clients whose combined debts total hundreds (if not thousands) of dollars. Because salon owners have no ability to collect those debts, they disallow offending clients to return until they remit payment. Meanwhile, those clients are simply avoiding the salon. This would be fine, except they’re avoiding the salon after they’ve financially impacted it, without having done anything to rectify that loss, and the salon hasn’t done anything to prevent future violations by other clients.

NO SALON OWNER SHOULD BE FORCED TO PLAY THE ROLE OF A DEBT COLLECTOR.

Salon owners have enough to do, so instead of implementing a policy that does little to deter no-shows and late-cancellations, introduce a policy that requires payment up front.

However, there are some caveats. Your salon must be above reproach. If you expect clients to be prompt, you must be prompt. If you plan to charge clients for late-cancellations, you must not cancel or reschedule appointments unless critically necessary.

Often, when I work with salon owners to implement these policies, I find that several operational changes need to be made.

Employees must be scheduled to arrive fifteen minutes earlier than their shift start time.

Every service must have protocols to allow for efficient scheduling.

Under no circumstances should a client be left waiting past their reservation time.

Consultations for variable time services need to be performed in advance. (Salons should be doing this anyway so clients can be patch tested, strand tested, quoted a price, and appropriately scheduled.)

Reminder calls/emails/texts need to be scheduled and delivered. (The Salon Policy Guide includes templates for reminders and a suggested schedule.)

The salon must be run like a tight ship. Clean, cordial, efficient—the salon must be all of these things.

Before implementing any policy, understand your customer base and who your marketing, branding, and business practices are attracting.

After a string of no-shows that impacted her income severely, a friend immediately introduced a pre-payment policy. As a result, she lost a lot of existing clients. New clients who contacted her to book complained about the policy and ultimately didn’t schedule. If you’re having similar problems, it’s not because the policy is bad, it’s because your marketing, branding, and practices are attracting the wrong people.

If your employees aren’t prompt or professional, the salon is a chaotic mess, your business specializes in ultra-fast services, and your prices are rock bottom, you’re attracting “convenience” clients. They don’t patronize your salon because they value quality beauty services but because it’s cheap, fast, and convenient. Their loyalty is contingent on your salon’s ability to beat the prices of your competitors and serve them when they wish to be served. They generally believe it’s your duty to cater to them by reserving your time for them without expectation, and to allow them to cancel or no-show without consequence. These clients are ones you’re sure to lose if you change your operational practices and shift to a policy that doesn’t suit their preferences; it’s up to you to determine whether or not that loss is one you can bear.

Establishing new standards can be tough. You will likely face some opposition and some turnover. Just remember–nobody knows your business like you do. Customers who complain aren’t just uninformed, they’re motivated by self-interest and don’t have your salon’s welfare in mind. However, you have bills to pay and a business to run, so hold your ground if the salon requires you to implement corrective measures. Focus on ensuring that your operations are exceptional. Commit to marketing effectively on an ongoing basis. Any vacancies left by departing clients will be quickly filled by those who appreciate and respect your business, and value the services it offers.

In case you haven’t noticed, This Ugly Beauty Business now has a Facebook group in addition to a Facebook page. In the group you can enjoy discussions with other beauty industry workers in a respectful, professional environment that values verifiable facts over anecdotal or hearsay evidence, ensuring that you receive guidance and advice from people who can point you to the resources you need to substantiate their claims. You won’t find that in any other online beauty industry networking groups that I’m aware of.

You can find the group at www.facebook.com/groups/thisuglybeautybusiness

Beauty industry survivalist, salon crisis interventionist, tactical verb-weapon specialist, and the leader of at least a hundred workplace revolutions, Tina Alberino is known as much for her extensive knowledge as for her sarcastic wit and mercilessly straightforward style. She’s the author of the book The Beauty Industry Survival Guide and the blog This Ugly Beauty Business. When she’s not writing, educating, or consulting, she can be found overthinking everything, identifying problems people didn’t know existed, and stubbornly working to change the things she cannot accept.